The National Treasury now expects the World Bank Group to clear a Sh96.9 billion ($750 million) loan next month after Parliament passed an improved version of a Conflict-of-Interest Bill, ending a major hurdle to the facility.
Kenya missed out on fresh funding from the multilateral lender in the fiscal cycle that ended June 30 after it failed to pass the key legislation, which was a major prerequisite to the release of additional financing by the bank, on time.
President William Ruto signed the Conflict-of-Interest Bill, 2023 into law on July 31,2025.
The facility is part of the World Bank’s development policy operations (DPO) and will be the second tranche after the disbursement of Sh155 billion ($1.2 billion) in June last year.
“We expect that maybe, before October, we should get the World Bank DPO,” said National Treasury Cabinet Secretary John Mbadi.
The release of the funds will be timely, coming at a time when the exchequer has struggled to mobilise external financing.
Data from the statements of actual exchequer receipts and issues for July, for instance, shows that the Treasury did not receive any external funds or grants for the opening month of the fiscal year.
The Treasury previously stated that its headache on external loans was instead a Sh51.6 billion ($400 million) syndicated loan from the Trade and Development Bank (TDB), which matures next month.
Part of the World Bank funding could be used to refinance the facility, as was the case with the settlement of balances due to investors holding the 2014 Eurobond notes after an earlier partial buyback in February 2024.
The Treasury has also doubled down on its pursuit of a new financing arrangement with the International Monetary Fund (IMF), which it deems crucial despite alternative external financing options.
Mr Mbadi hopes that Kenya can ride on the recent ratings outlook upgrade from Standard and Poor’s (S&P) to make its case to the Washington-based lender, which scrapped its last programme with the country in March over unmet conditions.
“We must get into an IMF programme because this programme also includes governance reforms,” he added.
“This time, we will be engaging the IMF from a stronger point of view. Our debt sustainability has improved.”
Previously, the Central Bank of Kenya indicated that Kenya would engage the IMF for a new funded programme from next month, when the fund begins Article IV consultations- a diagnostic programme that assesses the health of the economy.
Both the World Bank and IMF provide Kenya with concessional funding, reducing its reliance on expensive external borrowing such as Eurobonds and syndicated loans.
The National Treasury is expected to mobilise Sh901 billion in new funding for the 2025/26 cycle, with Sh287.4 billion coming from external losses.
